The UK’s private healthcare sector cooled slightly in the opening quarter of 2025, with overall admissions slipping for the first time in four years. Yet, the private medical insurance (PMI) market remains a solid anchor for insurers, underlining its growing importance as pressures on the NHS persist.
And it looks like there is a growing pipeline of customers for the insurance. Although the majority of new business appears to be older, there is interest coming through from younger buyers, who, if nothing else, are window shopping. “Yeah, I would say it's the majority of older people from around 50 going upwards to about 70,” a producer from Bournemouth-based Better Health Insurance Advice told Insurance Business. “That's the ones who maybe [have] a high demand for them because they want to get something in place as they get older.”
It’s promising, however, that younger people are doing their research now. “We do get a lot of website inquiries and quite a few of them we'd probably say in about the 30 to 50 category,” the producer said. “They’ve heard about private medical insurance and they want to know a bit more information and then get a price at the end.”
Figures from the latest report from the Private Healthcare Information Network (PHIN) show that reported private hospital admissions fell by 1% compared with the first quarter of 2024, with 240,730 patients treated between January and March. This marks the first year-on-year decline in Q1 activity since 2021, though volumes were still the second-highest ever recorded.
The decline was driven by a 4% contraction in self-pay procedures, which fell by 2,750 admissions. By contrast, PMI-funded cases edged up by less than half a percentage point, amounting to 730 additional admissions.
The devolved nations bucked the overall trend. Scotland posted a 5% increase in total admissions, while Northern Ireland rose 1.6%. England, which dominates the market, recorded a 1.3% fall, and Wales dipped 0.5%.
Insurance-backed admissions rose sharply in Scotland (10%) and Northern Ireland (5.2%). In England, however, the South East’s 4.5% decline offset growth in the Midlands, leaving overall PMI activity marginally lower. Self-pay demand fell across almost every region, with Yorkshire enduring the steepest decline at 14.7%.
The fall in private activity coincided with a surge in NHS England admissions, which reached 1.86 million in Q1 2025 - their highest since before the pandemic. Analysts note that NHS capacity recovery may be drawing some patients away from private options, particularly for routine procedures.
Even so, the private sector’s share of overall English admissions nudged upwards compared with the previous year, signalling that demand for independent provision remains robust despite fluctuations in volume.
Of the 10 most common private procedures, only chemotherapy recorded growth, up nearly 6%. Cataract surgery fell by 3.4%, while traditional hip and knee replacements contracted, partially offset by rising numbers of robotic-assisted operations.
Beyond the top 10, varicose vein treatments and allergy testing recorded sharp growth, while cosmetic interventions such as rhinoplasty and breast reductions slipped by double digits.
The consultant workforce expanded to its highest level in five years, led by gains in general surgery and trauma and orthopaedics. Patient demographics showed broadly stable insured admissions across both sexes, while self-pay volumes declined evenly. Admissions among those in their 40s rose, but fell sharply in the over-70s.
For insurers, the value of PMI continues to rise. According to LaingBuisson, the private medical insurance market generated £6.15 billion in premiums in 2023, out of a total private health-cover market worth £7.59 billion. The industry has grown from £6.65 billion in 2022, reflecting strong employer demand and heightened consumer interest as NHS waiting times lengthen.
The latest PHIN figures underscore a shift in the sector’s balance. While self-pay admissions appear vulnerable to fluctuations in consumer confidence and NHS performance, PMI is providing insurers with a steadily expanding premium base.
For hospital providers, the softening in self-pay volumes may present a challenge, but for insurers, the resilience of PMI premiums - now worth more than £6 billion annually - signals a market that remains firmly on an upward trajectory.
